File A Claim

How to File a Critical Illness Claim – and Get Your Maximum Payout

Critical Illness insurance is a form of Accelerated Death Benefit 1 that is included in a life insurance policy. When filing a critical illness claim the goal of a claimant is to get the maximum possible payout. A helpful way to understand a critical illness payout is that there’s a pot of money available and, depending on many variables, the claimant will end up with some percentage of the pot. It can be as high as 100 percent and as low as zero percent depending on the diagnosis, policy, insurer’s calculations and how the claim is prepared and filed.

The way payouts are determined by insurers includes many variables that most claimants aren’t aware of. Of course there’s the medical condition, but there’s also the severity of the condition, genetic traits of the insured, ethnicity effects and a host of other influences that can alter the life expectancy of the person afflicted. This, in turn, will have a decisive effect on the claim benefit offer.

What you’ll find here is not a bunch of “fluff” about how to complete a Claim form. This is a no-nonsense extensive discussion about How to File a Critical Illness Claim so you  receive the most money possible from the benefit pot of money, for the specific condition of the insured.

We start by looking at how filing a critical illness claim is unique and challenging

Why Filing a Critical Illness Claim is So Challenging

• Any claim filed in the first two years of the policy is subject to a Contestability Investigation before you can even file a claim. This opens the possibility of the entire insurance policy being cancelled. Assuming this doesn’t happen, the next challenge is,
• The health event must be on the list of covered events in the policy. Not all critical insurance policies cover the same medical conditions. (2) Some policies are more comprehensive than others. Assuming the health event is a Qualifying Event, the next challenge is,
• The health event cannot be excluded from coverage by the Policy Exclusions. Briefly, even if the insured suffers a Qualifying Event, the details of it may be excluded and the result is there won’t be a benefit payment. We’ll cover this in detail below. And, assuming the Qualifying Event is not excluded, the final challenge is how the insurer calculates the benefit offer.

• The calculation for the benefit offer will have debits and credits. The credits must be larger than the debits or the offer will be $0.00 (zero dollars).

Here is what you can do to get past each of these obstacles and secure the highest benefit payment. Think preparation, documentation and proactive compilation.

I. Preparation of the Claim

The insurance company will send their Claim Forms (3) package. You’ll complete the basics like name, address and contact information. There will be a question such as, “What is the Medical Condition you are apply for a benefit for?” The form gives space
for a very, very brief answer. The problem is a one- or two-word answer is wholly insufficient for the purpose. For example, a claimant might answer “Cancer”. But the details are what’s important to the claim. Like; type of cancer, Stage of diagnosis, and invasive or not. Instead of being limited by space, I answer with, “See attached Addendum.” This allows the claimant to expand on important information without limitation.

There will be a HIPAA Release in the package for the claimant to sign. This allows the insurer to retrieve medical records. The claimant should include a contact list with all doctors involved in their diagnosis. There may be specialists, oncologists, or radiologists who are each independent. Informing the insurer of who these doctors are and how to get in touch with them will speed up the claim and paint a more complete picture of the insured’s medical condition for consideration. The Claim Forms package will also include a Physician’s Statement. This isn’t for the claimant to complete, it’s for the treating doctor to complete. But, the insurer wants the claimant to get their doctor to complete and sign it. It’s helpful to tell the doctor in advance that the form is coming to them and the purpose. A challenge to the Physician’s Statement is the question, “Will the condition shorten the patient’s life expectancy?” It’s a malicious question because a doctor is thinking of the best interest of the patient, not the critical illness claim. Of course, the doctor is going to give an optimistic prognosis, which, may be used against the claimant for the purpose of establishing the severity of the condition for the claim.

II. Documentation of Relevant Facts: About You and Your Condition

It’s commonplace when someone is given a critical illness diagnosis they undertake an effort to learn about their disease. As they read, counsel with experts, and learn more, they become aware of things directly related to their condition. In some instances these related things can be markers for life expectancy, such as a family history of heart disease, or the impact of their ethnicity and anemia.

Because the critical illness claim offer will be based, in part, on the insured’s new life expectancy, the factors for each person should be reviewed in totality. In practice though, the insurance company won’t undertake this effort. Unless the claimant is presented as a unique person, with unique conditions, the insurer will treat anyone and everyone with a certain diagnosis as the same. Maximizing a claim offer requires advocating for the entire set of facts, not simply being lumped into a generic group.

III. Compile Supporting Information

Most definitely the insurance company will get the medical records related to the condition being claimed. As touched on above, what a claimant does not want is the insurer to get only part of the records. In other words, if the person had bypass surgery there’s likely to be encounters with a general doctor, a cardiologist, radiologist and a therapist. If the insurer only gets records from the general practitioner, they’re not getting the entire medical picture. This can minimize the claim offer.

The same is true of documenting family history, parent’s and sibling’s causes of death, medically researched studies  demonstrating the impact of genetic markers on a disease and so on. Any and all information that helps a claim should be included in the Claim package the claimant sends to the insurer.

What Qualifies as a Critical Illness

A Critical Illness policy may pay a lump sum benefit if you’re diagnosed with one of a specific list of severe, life-threatening conditions and the benefit calculation result is a positive number. Taken directly from a major insurers’ Policy, typical qualifying medical events include:

• Aorta Graft Surgery
• Aplastic Anemia
• Blindness
• Cancer
• Cystic Fibrosis
• Diagnosis of ALS (Amyotrophic Lateral Sclerosis)
• End-Stage Renal Failure
• Heart Attack
• Heart Valve Replacement
• Major Organ Transplant
• Motor Neuron Disease
• Stroke
• Sudden Cardiac Arrest

These medical events are shown here as a simple list. In practice, a critical illness policy will address each of these in detail with conditions and exclusions explained to greater or lesser degree. It’s important to read the policy to try and understand if any particular diagnosis will be covered or excluded by the policy. Below, see a complete list of covered conditions and the exception language attached to each. This gives the reader an understanding of why it’s important to Prepare, Document and Compile when filing a critical illness claim.

The core challenge? Your doctor’s diagnosis might not perfectly align with the insurer’s exact policy definitions. Insurers will conduct thorough investigations to find ways to reduce or deny your claim, arguing your condition doesn’t precisely meet their internal criteria. This is where professional representation becomes indispensable.

Help Preparing a Critical Illness Claim

If a claimant isn’t up to the difficulty and effort needed to prepare and file a critical illness claim, they can seek help from a claim expert. The person should be knowledgeable about critical illness claims, know the “factors” that influence claim value (discussed in
detail here) and have experience securing high payouts.

A comprehensive Expert approach includes:

1. Expert Claim Preparation: Meticulously prepare the claim forms, ensuring every detail aligns with policy requirements and insurer expectations.
2. Medical Opinion Integration: Include an expert medical opinion, applying scientific facts and evidence to unequivocally support the diagnosis and its
   impact on life expectancy.
3. Scientific & Evidentiary Support: Gather and present all necessary medical records, reports, and evidence to prove the condition meets the policy’s
   specific definitions.
4. Policy Interpretation & Negotiation: In alignment with the complex “factors” and formulas insurers use to calculate benefits, calculate the expected claim benefit. Challenge the insurer’s calculations when necessary, keeping them honest and pushing for the maximum cash offer.
5. Proactive Communication: Manage all communications with the insurer, preventing delays and protecting the claimant from unfair tactics.

[ Email me if you need help. ]

What to Expect After the Critical Illness Claim Has Been Filed

It may help the claimant manage their stress by having a grounded expectation of how long it will take the insurance company to make their claim offer.
If the claimant has followed the instruction here, the claim should move through the examination process quickly. Most State statutes allow the insurer 30 days or 45 days to make a claim determination once they’ve received all the information they need.

Upon receipt of the records needed, an underwriter and disability examiner will review the claim file. They’ll send their assessments and recommendations to the Claims Department and an offer will be calculated (4) . The insurer could request additional information, and, in some instances, they’ve been known to ask for current health status.

*Unless the insured’s health prognosis has taken a significant downturn, the claimant should refuse to answer this request. The policy benefit is based on a “diagnosis”, not on one’s ability to recover from it.  During this wait-and-see period, the insured should acquaint themselves with what an
offer looks like (see examples here). This is highly recommended here for a few reasons. First, a critical illness claim offer uses terms unfamiliar to most people. Here’s an example:

The Accelerated Benefit Amount is determined by an actuarial calculation of the present value of the gross death benefit and the required future premiums, less the administrative fee, and less any outstanding policy loan. And:

Determine the Future Premiums Payable under the base policy. Premium Rates are based on the Issue Age, Sex, Rate Class and Product Type.

Rate Class, Issue Age, Future Premiums Payable, Actuarial Calculation. These terms are probably foreign to most people. But the examples here are what a claimant can expect to see on their offer.
Getting familiar with new terminology is just part of deciphering a critical illness claim offer. The next part is understanding what the terminology means. Here’s another example of a claim offer explaining one aspect of how the offer amount was determined:

Determine the Present value of the Death Benefit less the Present Value of Future Premiums and round to the nearest whole number. The Accelerated Benefit Amount is determined by an actuarial calculation of the present value of the gross death benefit and the required future premiums, less the administrative fee, and less any outstanding policy loan.

Again, these examples are from a real claim offer and the same language can be expected in any new claim offer. Gaining an understanding of the format and language in a claim offer will help to decide if the offer is acceptable or should be challenged.

Accepting a Critical Illness Claim Offer

There are a few things to prepare for upon receiving a critical illness claim offer. First, you’ll have to accept the offer within 60 days and second, you’ll have to decide between a 50% offer or a 100% offer (5).
The claim offer will have a time limit, usually sixty days (60). During that time you’ll need to either accept the offer or you’ll forever lose the chance to receive a benefit for the illness. More plainly, if you file a claim for bone cancer, an offer is made, and you don’t accept it, you can never try to get money for bone cancer again. If you want to question the offer or dispute the amount being offered you’ll have to act fast.

The offer will have two payment options. One pays the maximum amount of money offered. This is a one-hundred percent benefit. The other option pays half of the maximum. If you choose the 100% benefit, you’ll receive a benefit payment, but the life insurance policy will be terminated. If you choose the 50% benefit, you’ll receive half the maximum and you’ll still have half of the life insurance in force. The best choice is completely dependent on the person and their unique circumstances. But again, once the decision is made it can’t be undone.

Critical Illness Policy Covered Medical Conditions and Exceptions

Critical Illness Qualifying Event An Accelerated Benefit can be elected under this rider only if the Insured experiences a Critical Illness Qualifying Event covered under this rider while the policy and this rider are in force. The Critical Illness Qualifying Events covered under this rider are:

1. Aorta Graft Surgery: A definite diagnosis by a Specialist that surgery is necessary for disease or trauma to the aorta requiring excision and surgical replacement of the diseased or traumatized aorta with a graft or stent. Aorta refers to the thoracic and abdominal aorta but not its branches.
The Insured must survive for 30 days following the Date of Diagnosis.

2. Aplastic Anemia: A definite diagnosis of a chronic persistent bone marrow failure, confirmed by biopsy, which results in anemia, neutropenia, and thrombocytopenia requiring blood product transfusion, and treatment with at least one of the following:
a) bone marrow stimulating agents,
b) immunosuppressant agents, or
c) bone marrow transplantation.
The diagnosis of Aplastic Anemia must be made by a Specialist. The Insured must survive for 30 days following the Date of Diagnosis.

3. Blindness: A definite diagnosis of the total and permanent loss of sight in both eyes as a result of disease or injury, evidenced by:
a) The corrected visual acuity being 20/200 or less in both eyes; or
b) The field of vision being less than 20 degrees in both eyes.
The diagnosis of Blindness must be made by a Specialist.

4. Cancer: A definite diagnosis of a disease manifested by the presence of one or more malignant tumors and characterized by the uncontrolled growth and spread of malignant cells and the invasion of normal tissue. Diagnosis of Cancer must be established according to the criteria of malignancy established by The American Board of Pathology after a study of the histocytologic architecture or pattern of the suspect
tumor, tissue, or specimen. The Insured must survive for 90 days following the Date of Diagnosis.

Exclusion: No benefit will be payable under this condition for:
a) any non-melanoma skin cancer, except those with distant lymph node metastasis,
b) pre-malignant lesions, benign tumors, or dysplasias,
c) carcinoma in-situ, or
d) localized non-invasive cancers such as, but not limited to,
i. thyroid cancers less than Stage 4,
ii. early prostate cancer diagnosed as T1N0M0 or equivalent staging
including T2a unless the Gleason score is higher than 6,
iii. chronic lymphocytic leukemia classified as Rai Stage 0, or
vi. noninvasive papillary cancer of the bladder AJCC TaN0M0.

5. Cystic Fibrosis: A definitive diagnosis of Cystic Fibrosis with evidence of chronic lung disease with or without pancreatic insufficiency. The diagnosis must be made by a Specialist and must be made before the Insured’s 20th birthday. The Insured must survive 30 days following the Date of Diagnosis.

6. Diagnosis of ALS (Amyotrophic Lateral Sclerosis): A definite diagnosis of ALS made by a Specialist. There must be permanent clinical neurologic impairment. Permanent clinical impairment is the situation in which the clinical specialist notes that the impairment
caused by the condition is not reversible and hence permanent. The Insured must survive for 30 days following the Date of Diagnosis.

7. End-Stage Renal Failure: A definite diagnosis of chronic irreversible failure of both kidneys to function, which necessitates regular hemodialysis or continuous peritoneal dialysis or results in renal transplantation. The diagnosis of Kidney Failure must be made by a Specialist. The Insured must survive 90 days following the Date of Diagnosis.

8. Heart Attack: A definite diagnosis of the death of a portion of the heart muscle resulting from inadequate blood supply to the relevant area. The diagnosis of Heart Attack must be made by a Specialist, supported by symptoms clinically accepted as consistent with the diagnosis of an acute myocardial infarction and at least one of the following conditions:
a) new characteristic electrocardiographic changes,
b) chest pain or other cardiac equivalent symptom,
c) diagnostic imaging changes, or
d) the characteristic rise above laboratory accepted normal values of
biochemical cardiac specific markers such as CK-MB or cardiac troponins.
The Insured must survive for 30 days following the Date of Diagnosis.
Exclusion: No benefit will be payable under this condition for other acute coronary
syndromes, including but not limited to, angina.

9. Heart Valve Replacement: A definite diagnosis determined by a Specialist that surgery is necessary to replace any heart valve with either a natural or mechanical valve. The Insured must survive 30 days following the Date of Diagnosis.

10. Major Organ Transplant: A definite diagnosis of the irreversible failure of any of the following organs or tissues: heart, both lungs, liver, both kidneys, pancreas, or bone marrow, and transplantation must be necessary. To qualify under Major Organ Transplant, a transplant specialist must document that transplantation is necessary and the Insured must be placed on a transplant waiting list as the recipient of a heart, lung, liver, kidney, pancreas, or bone marrow, and limited to these entities. The Insured must survive 30 days following the Date of Diagnosis.

11. Motor Neuron Disease: A definite diagnosis of one of the following conditions and is limited to these conditions:
a) primary lateral sclerosis,
b) progressive spinal muscular atrophy,
c) progressive bulbar palsy, or
d) pseudo bulbar palsy.

There must be permanent clinical neurologic impairment. Permanent clinical impairment is the situation in which the clinical specialist notes that the impairment caused by the condition is not reversible and hence permanent. The diagnosis of Motor Neuron Disease must be made by a Specialist. The Insured must survive for 30 days following the Date of Diagnosis.

12. Stroke: A definite diagnosis of an acute cerebrovascular accident or infarction (death) of brain tissue caused by hemorrhage, embolism, or thrombosis resulting in neurological deficit with persistent clinical symptoms for at least 30 consecutive days following the occurrence of the Stroke, and also resulting in either:

a) Permanent Neurological Deficit with Persisting Clinical Symptoms that are reasonably expected to last throughout the Insured’s life, or

b) definite evidence of recent death of brain tissue or hemorrhage on a brain scan.

The diagnosis of Stroke must be made by a Specialist. The Insured must survive for 30 days following the Date of Diagnosis.

Exclusion: No benefit will be payable under this condition for:

a) transient ischemic attacks,
b) intracerebral vascular events due to trauma,
c) lacunar infarcts which do not meet the definition of Stroke as described above, or
d) asymptomatic silent stroke found on imaging.

13. Sudden Cardiac Arrest: Defined as the sudden loss of heart function with interruption of blood circulation around the body resulting in unconsciousness and requiring resuscitation. After resuscitation, treatment may include:
a) surgical implantation of an Implantable Cardioverter-Defibrillator (ICD),
b) surgical implantation of a Cardiac Resynchronization Therapy with Defibrillator (CRT-D),
c) electrophysiological mapping with radio frequency ablation,
d) cardiac surgery, or
e) long-term medication therapy.
Exclusion: No benefit will be payable under this condition for:
a) insertion of a pacemaker without cardiac arrest,
b) insertion of a defibrillator without cardiac arrest, or
c) cardiac arrest resulting directly from alcohol, drug abuse, or other acts of self-harm.

The Insured must survive for 30 days following the date of Sudden Cardiac Arrest.

 

If you need help to file a critical illness claim contact me, Stephen C. Burgess.

 

(footnotes)

(1) https://www.tdi.texas.gov/forms/lhlifehealth/lac015.pdf
(2) https://statutes.capitol.texas.gov/Docs/IN/htm/IN.1111.htm#1111.052
(3) https://statutes.capitol.texas.gov/Docs/IN/htm/IN.1701.htm
(4) https://texas-sos.appianportalsgov.com/rules-and-meetings?$locale=en_US&interface=VIEW_TAC_SUMMARY&recordId=216341
(5) https://texas-sos.appianportalsgov.com/rules-and-meetings?$locale=en_US&interface=VIEW_TAC_SUMMARY&recordId=216338